The Thompson Crisis: Sloppy Whopper or Poor Career Personal Hygiene?

Did Yahoo CEO Scott Thompson really fib about his college education on his resume? Or was it, as he's reportedly claimed, a mistake on the part of a headhunter that happened years ago? Even if Thompson is only guilty of never checking his own corporate bio, it likely won't stop activist investor Dan Loeb from giving the board more grief. Meanwhile, jurors hit a wall, Facebook hit up investors, and Google hit the road.

By Paul Hartsock
05/11/12 1:38 PM PT

It's been more than a week since Yahoo CEO Scott Thompson's resume blew up in his face, and by the looks of things, the Yahoo board isn't bothered by it. They're not bothered enough to fire the guy, anyway. Thompson's still in charge at Yahoo, and a week's worth of morale-melting embarrassment and haranguing from Dan Loeb haven't been enough to change that.

Loeb, manager of hedge fund Third Point, has been taking shots at Yahoo's board for months. His group owns about 6 percent of Yahoo shares, and he wants a seat at the board's table. Last week, it seemed he might have found a silver bullet.

Thompson's official resume -- the one touted by Yahoo to investors and the SEC and the world at large -- specified that he'd earned degrees in both accounting and computer science at Stone Hill College. The problem with that is that Stone Hill didn't even offer a degree in CS until after Thompson graduated. His degree was in accounting only. Somehow, some way, a completely fabricated academic credential appeared in the official dossier of a major Silicon Valley CEO. For most employees, that would mean an automatic ride down the trapdoor in the boss' office.

Shortly after Loeb lobbed his resume grenade at Yahoo's board, the company affirmed that his findings were correct: Thompson only held an accounting degree, not one in CS. It called the false degree an "inadvertent error." Just an oopsy-daisy, no biggie, right?

But a little more digging revealed that this was a falsehood that predated Thompson's tenure as CEO of Yahoo, which started only a couple of months ago. Prior to that, he was at PayPal, and the phony degree appeared on his bio there too. And during a 2009 interview with TechNation, interviewer Moira Gunn brought up his college education, mentioning his supposed CS degree, and in his response, Thompson didn't correct her at all. He just went on to explain why it's so great to be an engineer.

The error -- or lie, whichever you want to call it -- was eventually made public, and Thompson immediately became the Valley's favorite punching bag. His company's earlier decision to launch a patent offensive against Facebook had already earned Yahoo a heavy helping of admonition, and there aren't many friends coming to its rescue now. Critics called for his resignation, Yahoo rivals pointed and laughed, and employee morale reportedly sank even lower, just after hitting what was once considered rock bottom due to a fresh round of layoffs.

Thompson still has his defenders, who say that even in the worst case scenario -- if Thompson flat-out lied -- fibbing on your resume doesn't necessarily have anything to do with how well you do your job, especially if it's been decades since college and you've had a solid career in the field ever since. So he doesn't have a CS degree; does that somehow make him unqualified to lead Yahoo? He's still new at the company, he was taken in to make big changes, and sacking him now would be more harmful to Yahoo than living with a bit of an embarrassment.

Boardroom Splashback

Thompson himself has reportedly blamed the situation on the work of a sloppy head-hunter who interviewed him years ago. Thompson said he spoke with an interviewer, and that person was the one who mistakenly wrote down that he had that CS degree. The mistake made its way to his PayPal bio, then on to Yahoo when he started working there. How did the mistake stay there for so long? Well, he never bothered to check. Why didn't he correct Gunn during the interview? I don't know -- maybe until this week he'd forgotten what he studied in college. See? All very simple.

But Thompson haters say it's a matter of principle. Lower-level employees at Yahoo would likely be fired immediately for making up a college degree, and they wouldn't get let off the hook for saying, "Oh, thanks for bringing that to my attention -- apparently that mistake has been on my resume for nearly a decade. I'm not accountable for that." So why doesn't that apply all the way to the top? There must be a least a few former Yahoos who were fired over the years over resume issues. Do they get their jobs back now? Do they sue?

At best, Thompson practiced some grossly neglectful career personal hygiene. And at worst, he lied. If it doesn't really matter whether Thompson actually has a CS degree, then why fabricate it in the first place? To what gain? If it was in any way intentional, it was a stupid risk with no upside and a high probability of calamity -- Loeb said he figured it out with a simple Google search. There was some very botched risk analysis going on.

It's true that many highly admired technology CEOs lie about lots of things that matter more than who had what degree when. But the really crafty ones have the foresight to set themselves up to win before the lie is even told. They may embarrass themselves on a moral level, but not on a strategic one. It's wrong and dishonest and bad karma and evil, but it's evil genius, and there's nothing genius about lying on your resume.

There has been some splashback in Yahoo's boardroom. Patti Hart, a board member who was part of the group responsible for hiring Thompson, has been dragged into the spotlight as well. In addition to apparently not checking up on Thompson's credentials, it seems she also had some inaccuracies in her own resume. She's still on the board for now, but she won't seek reelection.

The resume revelation wasn't the sudden-death firebomb Loeb may have been hoping for, but it has provided him with something to really sink his teeth into. In the week that followed, he sent several open-letter nastygrams to the board, demanded Thompson's departure, put forth recommendations for his replacement, suggested some new candidates for the board, and demanded info about the selection process that put Thompson in charge and gave seats to certain current board members.

Meanwhile, Yahoo's board presumably continues to chew on the issue, and for anyone not privy to those meetings, it's impossible to know exactly what they plan to do with Thompson. Maybe they're just getting their ducks in a row before officially swinging the axe, or they want to at least come up with some ideas for a replacement before getting rid of him. But with so little communication from the board of directors, and so little action to go with it, Yahoo and Thompson are starting to give the impression that they mean to ride this out with the hope that everyone forgets about it soon.

The Zuckerberg Show

Facebook is hitting the public market in a matter of days, but before it puts itself on the block, it needs to complete the time-honored tradition of the IPO roadshow. It started meeting this week with financial heavyweights who are considering buying massive bundles of FB stock the minute it hits the market.

Apparently the format it picked for its presentation wasn't an immediate hit in New York -- Facebook handled it like a lazy substitute teacher, filling time with a half-hour video. By the time Facebook hit Boston, the video was out -- but so was CEO Mark Zuckerberg for some reason.

But at least Facebook's message is clear, according to second-hand accounts -- media personnel aren't invited to sit in. Facebook wants investors to see potential for big growth and the network's value to small businesses.

Some potential investors still have their doubts, though. Warren Buffet sees little room for growth in profitable markets. Privacy concerns are still a big issue for the site. The business model isn't one that's been heavily tested in the past, and Zuckerberg plans to retain a great deal of control over the company. He's obviously led it to a pretty nice place so far, but those who buy in to a large degree may want a say in the company's direction, and it's difficult to say how much Zuckerberg will listen.

The financial world has also been getting its sock garters in a twist over Zuckerberg's appearance at some of these meetings. Apparently he's been showing up for his big presentations dressed in a hooded sweatshirt, rather than the suit-and-tie Wall Street standard.

This means nobody will take him seriously, Facebook will hit junk status within minutes of going on sale, and its employees will be reduced to selling lomo-filtered Polaroids of their breakfasts near freeway off-ramps for pennies. Or maybe it just means people like to complain about things, and Zuckerberg's just trying to find his own version of the black mock turtleneck.

Gridlock in SF

Last weekend, a dozen jurors in San Francisco held the fate of the mobile industry in their hands as they deliberated the case of Oracle v. Google, in which Oracle claimed Google illegally used Java code to develop its Android mobile OS. The stakes were high, both companies landed big hits during testimony, and it was up to 12 people to figure out whether Oracle deserved a huge payout for what Google did.

Whether Google should be held liable for copyright infringement rested on a few key questions that the jury had to answer. It decided that Google certainly did incorporate the structure, sequence and organization of Java in 37 APIs. It also decided that Google incorporated nine lines of actual Java code. So far, so good for Oracle.

But there was a question the jury could not agree on: Whether what Google did with Java constituted "fair use" of the material. That happened to be the key question of this section of the trial. Use of copyrighted material under fair use is legal, but defining what exactly fair use is can be very difficult. So was what Google did with Java fair? Jury's answer: "Dunno."

With the jury deadlocked on that point, Oracle made a bid to have the matter settled and asked US District Judge William Alsup for a ruling in its favor. Alsup declined. So a lot of elements remain in play. Based on the verdicts the jury did deliver, it would appear Oracle has the lead, but Google has options. It could argue fair use based on how greatly it transformed Java in the process of using it to create Android. But Android has been a huge, heavily commercialized money-maker for Google, and Oracle could argue it deserves its taste.

This is by no means the end of the story, though. The jury's decision, or lack thereof, was only in regard to the copyright portion of the trial. There's still the patent phase to finish up. Bonus: Google's asked for a new trial based on the jury's inability to render a decision, and the judge's refusal to rule in Oracle's favor suggests Google just might get what it wants. So this dispute is sure to drag on for a nice long time -- more appeals, more counterclaims, and a lot more chances for jurors to once again reach an impasse.

Drive My Car

The state of Nevada has welcomed Google's fleet of autonomous cars with open arms. The company's received an official Nevada license to drive -- or not drive, depending on how you look at it. The state will serve as a testing ground for Google's small fleet of self-driving cars.

There are some restrictions, though. The cars can only go into autonomous mode on certain roads. Humans will always be on board. The company had to present a rigorous safety program and prove it already had completed 10,000 miles of testing. And Google had to cough up a $1 million bond.

If Google or any other company can successfully create a self-driving car that's affordable, practical and actually self-driving, it could lead to some very big changes for anyone who has anything to do with automobiles. It could affect not just how we get around, but also how we spend our time and where we choose to live and work. It would be great to be able to grab a nap during a daily commute, or never have to worry about distracted drivers posing a danger.

But it's still a long distance between here and there, and for now, autonomous cars are anything but convenient. For instance, when Google takes its fleet out for a spin in Nevada, each car will need not just one, but two humans riding in the front seats. Presumably this is required for safety reasons -- self-driving cars are still very much a work in progress, and you want at least one actual person to be able to take control if anything goes wrong. But how long before self-driving cars are good enough that nobody has to pay attention? When will the system be so sharp that the so-called driver will truly be able to read a book, watch a video, have lunch, fall asleep, cut toenails, legally get home while intoxicated, or just plain zone out while the computer can be trusted to take care of everything?

Until autonomous cars are that reliable, they might not be worth the trouble. Driving a car that needs a little bit of attention -- if you never get to know exactly when it'll need it -- sounds just as tedious as regular driving. At least when you drive yourself you can settle into a comfortable and familiar task. Riding in a self-driving car that still requires an alert driver to be behind the wheel at all times might feel a little like riding alongside a 14-year-old with a learner's permit. You'll always need to watch out for when you need to grab the wheel and correct it.